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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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1-11037
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06-1249050
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(Commission File Number)
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(IRS Employer Identification No.)
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39 OLD RIDGEBURY ROAD, DANBURY, CT
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06810-5113
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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INDEX
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PART I - FINANCIAL INFORMATION
|
|
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Item 1.
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Consolidated Statements of Income - Praxair, Inc. and Subsidiaries Quarters Ended June 30, 2015 and 2014 (Unaudited)
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|
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Consolidated Statements of Income - Praxair Inc. and Subsidiaries Six Months Ended June 30, 2015 and 2014 (Unaudited)
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4
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|
|
|
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Consolidated Statements of Comprehensive Income - Praxair, Inc. and Subsidiaries Quarters Ended
June 30, 2015 and 2014 (Unaudited)
|
5
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|
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Consolidated Statements of Comprehensive Income - Praxair, Inc. and Subsidiaries Six Months Ended June 30, 2015 and 2014 (Unaudited)
|
6
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|
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|
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Condensed Consolidated Balance Sheets - Praxair, Inc. and Subsidiaries
June 30, 2015 and December 31, 2014 (Unaudited)
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|
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Condensed Consolidated Statements of Cash Flows - Praxair, Inc. and Subsidiaries
Six Months Ended June 30, 2015 and 2014 (Unaudited)
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8
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|
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|
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9
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|
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Item 2.
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||
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Item 3.
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||
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Item 4.
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||
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Item 1.
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||
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Item 1A.
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||
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|
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Item 2.
|
||
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|
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Item 3.
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||
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Item 4.
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||
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Item 5.
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Item 6.
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||
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Quarter Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
SALES
|
$
|
2,738
|
|
|
$
|
3,113
|
|
Cost of sales, exclusive of depreciation and amortization
|
1,516
|
|
|
1,767
|
|
||
Selling, general and administrative
|
297
|
|
|
335
|
|
||
Depreciation and amortization
|
278
|
|
|
293
|
|
||
Research and development
|
23
|
|
|
24
|
|
||
Cost reduction program and other charges
|
146
|
|
|
—
|
|
||
Other income (expense) - net
|
2
|
|
|
3
|
|
||
OPERATING PROFIT
|
480
|
|
|
697
|
|
||
Interest expense - net
|
40
|
|
|
43
|
|
||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
|
440
|
|
|
654
|
|
||
Income taxes
|
131
|
|
|
183
|
|
||
INCOME BEFORE EQUITY INVESTMENTS
|
309
|
|
|
471
|
|
||
Income from equity investments
|
10
|
|
|
10
|
|
||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
319
|
|
|
481
|
|
||
Less: noncontrolling interests
|
(11
|
)
|
|
(14
|
)
|
||
NET INCOME - PRAXAIR, INC.
|
$
|
308
|
|
|
$
|
467
|
|
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
|
|
|
|
||||
Basic earnings per share
|
$
|
1.07
|
|
|
$
|
1.59
|
|
Diluted earnings per share
|
$
|
1.06
|
|
|
$
|
1.58
|
|
Cash dividends per share
|
$
|
0.715
|
|
|
$
|
0.65
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
|
|
|
|
||||
Basic shares outstanding
|
287,939
|
|
|
292,945
|
|
||
Diluted shares outstanding
|
290,102
|
|
|
295,976
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
SALES
|
$
|
5,495
|
|
|
$
|
6,139
|
|
Cost of sales, exclusive of depreciation and amortization
|
3,046
|
|
|
3,493
|
|
||
Selling, general and administrative
|
596
|
|
|
661
|
|
||
Depreciation and amortization
|
555
|
|
|
578
|
|
||
Research and development
|
47
|
|
|
47
|
|
||
Cost reduction program and other charges
|
146
|
|
|
—
|
|
||
Other income (expense) - net
|
(2
|
)
|
|
12
|
|
||
OPERATING PROFIT
|
1,103
|
|
|
1,372
|
|
||
Interest expense - net
|
84
|
|
|
89
|
|
||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
|
1,019
|
|
|
1,283
|
|
||
Income taxes
|
293
|
|
|
359
|
|
||
INCOME BEFORE EQUITY INVESTMENTS
|
726
|
|
|
924
|
|
||
Income from equity investments
|
21
|
|
|
19
|
|
||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
747
|
|
|
943
|
|
||
Less: noncontrolling interests
|
(23
|
)
|
|
(28
|
)
|
||
NET INCOME - PRAXAIR, INC.
|
$
|
724
|
|
|
$
|
915
|
|
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
|
|
|
|
||||
Basic earnings per share
|
$
|
2.51
|
|
|
$
|
3.12
|
|
Diluted earnings per share
|
$
|
2.49
|
|
|
$
|
3.08
|
|
Cash dividends per share
|
$
|
1.43
|
|
|
$
|
1.30
|
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WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
|
|
|
|
||||
Basic shares outstanding
|
288,541
|
|
|
293,570
|
|
||
Diluted shares outstanding
|
290,940
|
|
|
296,679
|
|
|
Quarter Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
$
|
319
|
|
|
$
|
481
|
|
|
|
|
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||
Translation adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
70
|
|
|
164
|
|
||
Income taxes
|
21
|
|
|
(6
|
)
|
||
Translation adjustments
|
91
|
|
|
158
|
|
||
Funded status - retirement obligations (Note 11):
|
|
|
|
||||
Retirement program remeasurements
|
(32
|
)
|
|
(18
|
)
|
||
Reclassifications to net income
|
20
|
|
|
14
|
|
||
Income taxes
|
4
|
|
|
1
|
|
||
Funded status - retirement obligations
|
(8
|
)
|
|
(3
|
)
|
||
Derivative instruments (Note 6):
|
|
|
|
||||
Current quarter unrealized gain (loss)
|
—
|
|
|
—
|
|
||
Reclassifications to net income
|
—
|
|
|
—
|
|
||
Income taxes
|
—
|
|
|
—
|
|
||
Derivative instruments
|
—
|
|
|
—
|
|
||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
83
|
|
|
155
|
|
||
|
|
|
|
||||
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)
|
402
|
|
|
636
|
|
||
Less: noncontrolling interests
|
(21
|
)
|
|
(13
|
)
|
||
COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.
|
$
|
381
|
|
|
$
|
623
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
$
|
747
|
|
|
$
|
943
|
|
|
|
|
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||
Translation adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
(574
|
)
|
|
144
|
|
||
Reclassifications to net income
|
—
|
|
|
(3
|
)
|
||
Income taxes
|
(13
|
)
|
|
(15
|
)
|
||
Translation adjustments
|
(587
|
)
|
|
126
|
|
||
Funded status - retirement obligations (Note 11):
|
|
|
|
||||
Retirement program remeasurements
|
(23
|
)
|
|
(16
|
)
|
||
Reclassifications to net income
|
39
|
|
|
27
|
|
||
Income taxes
|
(6
|
)
|
|
(4
|
)
|
||
Funded status - retirement obligations
|
10
|
|
|
7
|
|
||
Derivative instruments (Note 6):
|
|
|
|
||||
Current period unrealized gain
|
—
|
|
|
3
|
|
||
Income taxes
|
—
|
|
|
(1
|
)
|
||
Derivative instruments
|
—
|
|
|
2
|
|
||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
(577
|
)
|
|
135
|
|
||
|
|
|
|
||||
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
170
|
|
|
1,078
|
|
||
Less: noncontrolling interests
|
(3
|
)
|
|
(25
|
)
|
||
COMPREHENSIVE INCOME - PRAXAIR, INC.
|
$
|
167
|
|
|
$
|
1,053
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
136
|
|
|
$
|
126
|
|
Accounts receivable - net
|
1,760
|
|
|
1,796
|
|
||
Inventories
|
548
|
|
|
551
|
|
||
Prepaid and other current assets
|
376
|
|
|
366
|
|
||
TOTAL CURRENT ASSETS
|
2,820
|
|
|
2,839
|
|
||
Property, plant and equipment (less accumulated depreciation of $11,878 in 2015 and $11,857 in 2014)
|
11,363
|
|
|
11,997
|
|
||
Goodwill
|
3,065
|
|
|
3,121
|
|
||
Other intangible assets - net
|
582
|
|
|
603
|
|
||
Other long-term assets
|
1,237
|
|
|
1,242
|
|
||
TOTAL ASSETS
|
$
|
19,067
|
|
|
$
|
19,802
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
782
|
|
|
$
|
864
|
|
Short-term debt
|
532
|
|
|
587
|
|
||
Current portion of long-term debt
|
2
|
|
|
2
|
|
||
Other current liabilities
|
930
|
|
|
1,037
|
|
||
TOTAL CURRENT LIABILITIES
|
2,246
|
|
|
2,490
|
|
||
Long-term debt
|
8,813
|
|
|
8,669
|
|
||
Other long-term liabilities
|
2,489
|
|
|
2,457
|
|
||
TOTAL LIABILITIES
|
13,548
|
|
|
13,616
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Redeemable noncontrolling interests
|
175
|
|
|
176
|
|
||
Praxair, Inc. Shareholders’ Equity:
|
|
|
|
||||
Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2015 and 2014 - 383,230,625 shares
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
3,989
|
|
|
3,994
|
|
||
Retained earnings
|
11,768
|
|
|
11,461
|
|
||
Accumulated other comprehensive income (loss)
|
(3,742
|
)
|
|
(3,185
|
)
|
||
Less: Treasury stock, at cost (2015 - 96,759,016 shares and 2014 - 93,969,017 shares)
|
(7,055
|
)
|
|
(6,651
|
)
|
||
Total Praxair, Inc. Shareholders’ Equity
|
4,964
|
|
|
5,623
|
|
||
Noncontrolling interests
|
380
|
|
|
387
|
|
||
TOTAL EQUITY
|
5,344
|
|
|
6,010
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
19,067
|
|
|
$
|
19,802
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
OPERATIONS
|
|
|
|
||||
Net income - Praxair, Inc.
|
$
|
724
|
|
|
$
|
915
|
|
Noncontrolling interests
|
23
|
|
|
28
|
|
||
Net income (including noncontrolling interests)
|
747
|
|
|
943
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Cost reduction program and other charges, net of payments
|
135
|
|
|
—
|
|
||
Depreciation and amortization
|
555
|
|
|
578
|
|
||
Deferred income taxes
|
(17
|
)
|
|
17
|
|
||
Share-based compensation
|
17
|
|
|
28
|
|
||
Working capital:
|
|
|
|
||||
Accounts receivable
|
(44
|
)
|
|
(169
|
)
|
||
Inventory
|
(15
|
)
|
|
(33
|
)
|
||
Prepaid and other current assets
|
(31
|
)
|
|
36
|
|
||
Payables and accruals
|
(63
|
)
|
|
(32
|
)
|
||
Pension contributions
|
(12
|
)
|
|
(13
|
)
|
||
Long-term assets, liabilities and other
|
(57
|
)
|
|
28
|
|
||
Net cash provided by operating activities
|
1,215
|
|
|
1,383
|
|
||
INVESTING
|
|
|
|
||||
Capital expenditures
|
(749
|
)
|
|
(777
|
)
|
||
Acquisitions, net of cash acquired
|
(43
|
)
|
|
(170
|
)
|
||
Divestitures and asset sales
|
240
|
|
|
71
|
|
||
Net cash used for investing activities
|
(552
|
)
|
|
(876
|
)
|
||
FINANCING
|
|
|
|
||||
Short-term debt borrowings (repayments) - net
|
(53
|
)
|
|
(186
|
)
|
||
Long-term debt borrowings
|
756
|
|
|
858
|
|
||
Long-term debt repayments
|
(502
|
)
|
|
(308
|
)
|
||
Issuances of common stock
|
61
|
|
|
69
|
|
||
Purchases of common stock
|
(469
|
)
|
|
(446
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(412
|
)
|
|
(381
|
)
|
||
Excess tax benefit on share-based compensation
|
17
|
|
|
24
|
|
||
Noncontrolling interest transactions and other
|
(25
|
)
|
|
(111
|
)
|
||
Net cash (used for) provided by financing activities
|
(627
|
)
|
|
(481
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(26
|
)
|
|
9
|
|
||
Change in cash and cash equivalents
|
10
|
|
|
35
|
|
||
Cash and cash equivalents, beginning-of-period
|
126
|
|
|
138
|
|
||
Cash and cash equivalents, end-of-period
|
$
|
136
|
|
|
$
|
173
|
|
•
|
Reporting Discontinued Operations
– In April 2014, the FASB issued updated guidance on the reporting and disclosures of discontinued operations. The new guidance requires that the disposal of a component of an entity be reported as discontinued operations only if the action represents a strategic shift that will have a major effect on an entity’s operations and financial results, and would require expanded disclosures. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.
|
•
|
Revenue Recognition
– In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and would require expanded disclosures. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.
|
•
|
Accounting for Share-based Compensation
- In June 2014, the FASB issued updated guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. Praxair does not expect this requirement to have a significant impact on the condensed consolidated financial statements. This guidance will be effective for Praxair beginning in the first quarter 2016, with early adoption optional.
|
•
|
Presentation of Debt Issuance Costs
– In April 2015, the FASB issued updated guidance on the presentation of debt issuance costs. The new guidance requires debt issuance costs to be classified as debt rather than deferred charges within the condensed consolidated financial statements. Praxair does not expect this requirement to have a significant impact on the condensed consolidated financial statements. This guidance will be effective for Praxair beginning in the first quarter 2016 on a retrospective basis, with early adoption optional. The balance sheet reclassification required by this standard will not be material for Praxair.
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
North America
|
$
|
9
|
|
|
$
|
17
|
|
|
$
|
26
|
|
Europe
|
11
|
|
|
9
|
|
|
20
|
|
|||
South America
|
15
|
|
|
47
|
|
|
62
|
|
|||
Asia
|
9
|
|
|
10
|
|
|
19
|
|
|||
Surface technologies
|
9
|
|
|
10
|
|
|
19
|
|
|||
Total
|
$
|
53
|
|
|
$
|
93
|
|
|
$
|
146
|
|
i.
|
The North America charges of
$17 million
relate primarily to the decision to consolidate certain manufacturing and distribution locations for efficiencies and cost reduction.
|
ii.
|
The Europe charges of
$9 million
are primarily for the restructuring of operations in Russia and energy-related businesses in Northern Europe.
|
iii.
|
The South America charges of
$47 million
include costs primarily associated with a decision to exit a non-core business and other operations in South America.
|
iv.
|
The Asia charges of
$10 million
include costs primarily related to an asset disposal in China.
|
v.
|
The Surface Technologies charges of
$10 million
relate to the realignment of sales and manufacturing operations in Europe and the United States for efficiencies and cost reduction.
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
Cost reduction program and other charges - Q2 2015
|
$
|
53
|
|
|
$
|
93
|
|
|
$
|
146
|
|
Less: Cash payments
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Less: Non-cash asset write-offs
|
—
|
|
|
(68
|
)
|
|
(68
|
)
|
|||
Foreign currency translation
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance, June 30, 2015
|
$
|
41
|
|
|
$
|
25
|
|
|
$
|
66
|
|
(Millions of dollars)
|
June 30,
2015 |
|
December 31,
2014 |
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
198
|
|
|
$
|
200
|
|
Work in process
|
54
|
|
|
52
|
|
||
Finished goods
|
296
|
|
|
299
|
|
||
Total inventories
|
$
|
548
|
|
|
$
|
551
|
|
(Millions of dollars)
|
June 30,
2015 |
|
December 31,
2014 |
||||
SHORT-TERM
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
444
|
|
|
$
|
514
|
|
Other bank borrowings (primarily international)
|
88
|
|
|
73
|
|
||
Total short-term debt
|
532
|
|
|
587
|
|
||
LONG-TERM
|
|
|
|
||||
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
|
|
|
|
||||
4.625% Notes due 2015 (a)
|
—
|
|
|
500
|
|
||
3.25% Notes due 2015 (b, d)
|
402
|
|
|
408
|
|
||
0.75% Notes due 2016 (b)
|
400
|
|
|
400
|
|
||
Floating Rate Notes due 2017 (e)
|
150
|
|
|
—
|
|
||
5.20% Notes due 2017
|
325
|
|
|
325
|
|
||
1.05% Notes due 2017
|
400
|
|
|
400
|
|
||
1.20% Notes due 2018
|
500
|
|
|
500
|
|
||
1.25% Notes due 2018 (c, d)
|
483
|
|
|
481
|
|
||
4.50% Notes due 2019 (c)
|
599
|
|
|
599
|
|
||
1.90% Notes due 2019
|
500
|
|
|
500
|
|
||
1.50% Euro-denominated notes due 2020 (c)
|
665
|
|
|
722
|
|
||
4.05% Notes due 2021 (c)
|
499
|
|
|
499
|
|
||
3.00% Notes due 2021 (c)
|
497
|
|
|
497
|
|
||
2.45% Notes due 2022 (c)
|
598
|
|
|
598
|
|
||
2.20% Notes due 2022 (c)
|
499
|
|
|
499
|
|
||
2.70% Notes due 2023 (c)
|
499
|
|
|
499
|
|
||
2.65% Notes due 2025 (c, e)
|
398
|
|
|
—
|
|
||
1.625% Euro-denominated notes due 2025 (c)
|
552
|
|
|
599
|
|
||
3.55% Notes due 2042 (c, e)
|
666
|
|
|
466
|
|
||
Other
|
4
|
|
|
4
|
|
||
International bank borrowings
|
171
|
|
|
167
|
|
||
Obligations under capital leases
|
8
|
|
|
8
|
|
||
|
8,815
|
|
|
8,671
|
|
||
Less: current portion of long-term debt
|
(2
|
)
|
|
(2
|
)
|
||
Total long-term debt
|
8,813
|
|
|
8,669
|
|
||
Total debt
|
$
|
9,347
|
|
|
$
|
9,258
|
|
(a)
|
In March 2015, Praxair repaid
$500 million
of
4.625%
notes that became due.
|
(b)
|
Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing
$2.5 billion
long-term credit facility.
|
(c)
|
Amounts are net of unamortized discounts.
|
(d)
|
June 30, 2015
and
December 31, 2014
include a
$10 million
and
$14 million
fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.
|
(e)
|
On February 5, 2015, Praxair issued
$150 million
of floating rate notes that bear interest at the Federal funds effective rate plus
0.33%
due 2017,
$400 million
of
2.65%
fixed rate notes due 2025 and
$200 million
of
3.550%
fixed rate notes due in 2042. The proceeds were used for general corporate purposes, including the repayment of outstanding indebtedness.
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
(Millions of dollars)
|
June 30,
2015 |
|
December 31,
2014 |
|
June 30,
2015 |
|
December 31,
2014 |
|
June 30,
2015 |
|
December 31,
2014 |
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,497
|
|
|
$
|
2,427
|
|
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
15
|
|
|
$
|
13
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (b)
|
875
|
|
|
875
|
|
|
10
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||||
Total Derivatives
|
$
|
3,372
|
|
|
$
|
3,302
|
|
|
$
|
23
|
|
|
$
|
19
|
|
|
$
|
15
|
|
|
$
|
13
|
|
(a)
|
Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.
|
(b)
|
Assets are recorded in other current and other long term assets
|
|
Year
Terminated
|
|
Original
Gain /
(Loss)
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
June 30,
2015 |
|
December 31,
2014 |
||||||||||
Treasury Rate Locks
|
|
|
|
|
|
|
|
||||||
Underlying debt instrument:
|
|
|
|
|
|
|
|
||||||
$500 million 2.20% fixed-rate notes that mature in 2022 (b)
|
2012
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
$500 million 3.00% fixed-rate notes that mature in 2021 (b)
|
2011
|
|
(11
|
)
|
|
(7
|
)
|
|
(8
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
7
|
|
|
8
|
|
|||
$500 million 4.625% fixed-rate notes that mature in 2015 (b)
|
2008
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||
Total - pre-tax
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
||
Less: income taxes
|
|
|
|
|
—
|
|
|
—
|
|
||||
After- tax amounts
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
(a)
|
The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.
|
(b)
|
The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the
$600 million
4.50%
fixed-rate notes that mature in 2019. The notional amount of this contract was
$500 million
.
|
|
Amount of Pre-Tax Gain (Loss)
Recognized in Earnings *
|
||||||||||||||
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
|
|
|
|
|
|
|
||||||||
Debt-related
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
(78
|
)
|
|
$
|
29
|
|
Other balance sheet items
|
1
|
|
|
1
|
|
|
(5
|
)
|
|
4
|
|
||||
Total
|
$
|
2
|
|
|
$
|
25
|
|
|
$
|
(83
|
)
|
|
$
|
33
|
|
|
Quarter Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI
|
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of
Income
|
||||||||||||
(Millions of dollars)
|
June 30,
2015 |
|
June 30,
2014 |
|
June 30,
2015 |
|
June 30,
2014 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Net Investment Hedge
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Six Months Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI
|
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of
Income
|
||||||||||||
(Millions of dollars)
|
June 30,
2015 |
|
June 30,
2014 |
|
June 30,
2015 |
|
June 30,
2014 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Net Investment Hedge
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
(Millions of dollars)
|
June 30,
2015 |
|
December 31,
2014 |
|
June 30,
2015 |
|
December 31,
2014 |
|
June 30,
2015 |
|
December 31,
2014 |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
23
|
|
|
$
|
19
|
|
|
—
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
15
|
|
|
$
|
13
|
|
|
—
|
|
|
—
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator (Millions of dollars)
|
|
|
|
|
|
|
|
||||||||
Net income - Praxair, Inc.
|
$
|
308
|
|
|
$
|
467
|
|
|
$
|
724
|
|
|
$
|
915
|
|
Denominator (Thousands of shares)
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
287,535
|
|
|
292,434
|
|
|
288,142
|
|
|
293,063
|
|
||||
Shares earned and issuable under compensation plans
|
404
|
|
|
511
|
|
|
399
|
|
|
507
|
|
||||
Weighted average shares used in basic earnings per share
|
287,939
|
|
|
292,945
|
|
|
288,541
|
|
|
293,570
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Stock options and awards
|
2,163
|
|
|
3,031
|
|
|
2,399
|
|
|
3,109
|
|
||||
Weighted average shares used in diluted earnings per share
|
290,102
|
|
|
295,976
|
|
|
290,940
|
|
|
296,679
|
|
||||
Basic Earnings Per Share
|
$
|
1.07
|
|
|
$
|
1.59
|
|
|
$
|
2.51
|
|
|
$
|
3.12
|
|
Diluted Earnings Per Share
|
$
|
1.06
|
|
|
$
|
1.58
|
|
|
$
|
2.49
|
|
|
$
|
3.08
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2014
|
$
|
2,139
|
|
|
$
|
147
|
|
|
$
|
654
|
|
|
$
|
38
|
|
|
$
|
143
|
|
|
$
|
3,121
|
|
Acquisitions (Note 3)
|
15
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Purchase adjustments & other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
(16
|
)
|
|
(26
|
)
|
|
(38
|
)
|
|
—
|
|
|
(4
|
)
|
|
(84
|
)
|
||||||
Balance, June 30, 2015
|
$
|
2,138
|
|
|
$
|
134
|
|
|
$
|
616
|
|
|
$
|
38
|
|
|
$
|
139
|
|
|
$
|
3,065
|
|
(Millions of dollars)
|
Customer &
License/Use
Agreements
|
|
Non-compete
Agreements
|
|
Patents &
Other
|
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2014
|
$
|
693
|
|
|
$
|
37
|
|
|
$
|
47
|
|
|
$
|
777
|
|
Additions (Note 3)
|
9
|
|
|
1
|
|
|
—
|
|
|
10
|
|
||||
Foreign currency translation
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Other *
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Balance, June 30, 2015
|
$
|
692
|
|
|
$
|
37
|
|
|
$
|
47
|
|
|
$
|
776
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2014
|
$
|
(147
|
)
|
|
$
|
(18
|
)
|
|
$
|
(9
|
)
|
|
$
|
(174
|
)
|
Amortization expense
|
(18
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(23
|
)
|
||||
Foreign currency translation
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Other *
|
(2
|
)
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
||||
Balance, June 30, 2015
|
$
|
(163
|
)
|
|
$
|
(20
|
)
|
|
$
|
(11
|
)
|
|
$
|
(194
|
)
|
Net balance at June 30, 2015
|
$
|
529
|
|
|
$
|
17
|
|
|
$
|
36
|
|
|
$
|
582
|
|
|
Six Months Ended June 30,
|
||||
|
2015
|
|
2014
|
||
Dividend yield
|
2.2
|
%
|
|
2.0
|
%
|
Volatility
|
13.5
|
%
|
|
15.2
|
%
|
Risk-free interest rate
|
1.51
|
%
|
|
1.57
|
%
|
Expected term years
|
5
|
|
|
5
|
|
|
Number of
Options (000’s)
|
|
Average
Exercise Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2015
|
10,981
|
|
|
$
|
89.02
|
|
|
|
|
|
||
Granted
|
1,567
|
|
|
128.38
|
|
|
|
|
|
|||
Exercised
|
(839
|
)
|
|
63.20
|
|
|
|
|
|
|||
Cancelled or Expired
|
(57
|
)
|
|
121.95
|
|
|
|
|
|
|||
Outstanding at June 30, 2015
|
11,652
|
|
|
96.01
|
|
|
5.6
|
|
$
|
299
|
|
|
Exercisable at June 30, 2015
|
8,892
|
|
|
$
|
86.73
|
|
|
4.5
|
|
$
|
296
|
|
|
Performance-Based
|
|
Restricted Stock
|
||||||||||
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
||||||
Non-vested at January 1, 2015
|
833
|
|
|
$
|
109.09
|
|
|
307
|
|
|
$
|
106.63
|
|
Granted*
|
215
|
|
|
120.04
|
|
|
82
|
|
|
120.37
|
|
||
Vested
|
(225
|
)
|
|
103.16
|
|
|
(87
|
)
|
|
108.36
|
|
||
Cancelled
|
(25
|
)
|
|
113.86
|
|
|
(21
|
)
|
|
111.08
|
|
||
Non-vested at June 30, 2015
|
798
|
|
|
$
|
114.48
|
|
|
281
|
|
|
$
|
111.51
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||
|
Pensions
|
|
OPEB
|
|
Pensions
|
|
OPEB
|
|||||||||||||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
2014
|
||||||||||||||||
Service cost
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
28
|
|
|
$
|
26
|
|
|
$
|
2
|
|
$
|
2
|
|
Interest cost
|
29
|
|
|
31
|
|
|
2
|
|
|
3
|
|
|
57
|
|
|
62
|
|
|
4
|
|
6
|
|
||||||||
Expected return on plan assets
|
(39
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
(80
|
)
|
|
—
|
|
—
|
|
||||||||
Net amortization and deferral
|
21
|
|
|
16
|
|
|
(1
|
)
|
|
(2
|
)
|
|
41
|
|
|
31
|
|
|
(2
|
)
|
(4
|
)
|
||||||||
Net periodic benefit cost before pension settlement charge
|
$
|
25
|
|
|
$
|
20
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
48
|
|
|
$
|
39
|
|
|
$
|
4
|
|
$
|
4
|
|
•
|
During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations, and (ii) the amount of tax reductions available under the Refis Program. Although it is difficult to estimate the timing of resolution of legal matters in Brazil, it is possible that individual disputed matters may be resolved during the next year.
|
•
|
At
June 30, 2015
the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately
$200 million
. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.
|
•
|
On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of
R$2.2 billion
Brazilian reais (
US$709 million
) against White Martins, the Brazil-based subsidiary of Praxair, Inc. In response to a motion for clarification, the fine was reduced to
R$1.7 billion
Brazilian reais (
US$548 million
) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
SALES
(a)
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
1,482
|
|
|
$
|
1,628
|
|
|
$
|
2,981
|
|
|
$
|
3,208
|
|
Europe
|
331
|
|
|
408
|
|
|
657
|
|
|
805
|
|
||||
South America
|
388
|
|
|
509
|
|
|
789
|
|
|
997
|
|
||||
Asia
|
387
|
|
|
394
|
|
|
758
|
|
|
786
|
|
||||
Surface Technologies
|
150
|
|
|
174
|
|
|
310
|
|
|
343
|
|
||||
Total sales
|
$
|
2,738
|
|
|
$
|
3,113
|
|
|
$
|
5,495
|
|
|
$
|
6,139
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
OPERATING PROFIT
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
388
|
|
|
$
|
398
|
|
|
$
|
767
|
|
|
$
|
776
|
|
Europe
|
63
|
|
|
78
|
|
|
125
|
|
|
157
|
|
||||
South America
|
81
|
|
|
113
|
|
|
166
|
|
|
226
|
|
||||
Asia
|
69
|
|
|
76
|
|
|
138
|
|
|
151
|
|
||||
Surface Technologies
|
25
|
|
|
32
|
|
|
53
|
|
|
62
|
|
||||
Segment operating profit
|
626
|
|
|
697
|
|
|
1,249
|
|
|
1,372
|
|
||||
Cost reduction program and other charges (Note 2)
|
(146
|
)
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
||||
Total operating profit
|
$
|
480
|
|
|
$
|
697
|
|
|
$
|
1,103
|
|
|
$
|
1,372
|
|
(a)
|
Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.
|
|
Quarter Ended June 30,
|
||||||||||||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, beginning of period
|
$
|
5,018
|
|
|
$
|
375
|
|
|
$
|
5,393
|
|
|
$
|
6,600
|
|
|
$
|
398
|
|
|
$
|
6,998
|
|
Net income (a)
|
308
|
|
|
8
|
|
|
316
|
|
|
467
|
|
|
10
|
|
|
477
|
|
||||||
Other comprehensive income (loss)
|
73
|
|
|
7
|
|
|
80
|
|
|
153
|
|
|
2
|
|
|
155
|
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions) (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||
Dividends and other capital changes
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||||
Redemption value adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends to Praxair, Inc. common stock holders ($0.715 per share in 2015 and $0.65 per share in 2014)
|
(205
|
)
|
|
—
|
|
|
(205
|
)
|
|
(190
|
)
|
|
—
|
|
|
(190
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
For employee savings and incentive plans
|
14
|
|
|
—
|
|
|
14
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||
Purchases of common stock
|
(257
|
)
|
|
—
|
|
|
(257
|
)
|
|
(157
|
)
|
|
—
|
|
|
(157
|
)
|
||||||
Tax benefit from share-based compensation
|
3
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Share-based compensation
|
10
|
|
|
—
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||
Balance, end of period
|
$
|
4,964
|
|
|
$
|
380
|
|
|
$
|
5,344
|
|
|
$
|
6,911
|
|
|
$
|
395
|
|
|
$
|
7,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30,
|
||||||||||||||||||||||
(Millions of dollars)
|
2015
|
|
2014
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
|
Praxair, Inc.
Shareholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
||||||||||||
Balance, beginning of period
|
$
|
5,623
|
|
|
$
|
387
|
|
|
$
|
6,010
|
|
|
$
|
6,609
|
|
|
$
|
394
|
|
|
$
|
7,003
|
|
Net income (a)
|
724
|
|
|
17
|
|
|
741
|
|
|
915
|
|
|
20
|
|
|
935
|
|
||||||
Other comprehensive loss
|
(557
|
)
|
|
(14
|
)
|
|
(571
|
)
|
|
136
|
|
|
(1
|
)
|
|
135
|
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions) (b)
|
—
|
|
|
2
|
|
|
2
|
|
|
(24
|
)
|
|
3
|
|
|
(21
|
)
|
||||||
Dividends and other capital changes
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
||||||
Redemption value adjustments
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Dividends to Praxair, Inc. common stock holders ($1.43 per share in 2015 and $1.30 per share in 2014)
|
(412
|
)
|
|
—
|
|
|
(412
|
)
|
|
(381
|
)
|
|
—
|
|
|
(381
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
3
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
For employee savings and incentive plans
|
44
|
|
|
—
|
|
|
44
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||||
Purchases of common stock
|
(491
|
)
|
|
—
|
|
|
(491
|
)
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
||||||
Tax benefit from share-based compensation
|
17
|
|
|
—
|
|
|
17
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||||
Share-based compensation
|
17
|
|
|
—
|
|
|
17
|
|
|
28
|
|
|
—
|
|
|
28
|
|
||||||
Balance, end of period
|
$
|
4,964
|
|
|
$
|
380
|
|
|
$
|
5,344
|
|
|
$
|
6,911
|
|
|
$
|
395
|
|
|
$
|
7,306
|
|
(a)
|
Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests of
$3 million
and $
6 million
for the quarter and six months ended
June 30,
2015
, respectively (
$4 million
and $
8 million
for the same time periods in
2014
, respectively), which is not part of total equity (see redeemable noncontrolling interests section below).
|
(b)
|
Praxair increased its ownership in certain consolidated subsidiaries. The difference between the purchase price and the related noncontrolling interests was recorded as a decrease in Praxair's additional paid-in-capital.
|
|
June 30,
|
|
December 31,
|
||||
(Millions of dollars)
|
2015
|
|
2014
|
||||
Cumulative translation adjustment (includes $76 million and $64 million tax charge in June 30, 2015 and December 31, 2014, respectively)
|
|
|
|
||||
North America
|
$
|
(670
|
)
|
|
$
|
(553
|
)
|
South America
|
(1,832
|
)
|
|
(1,510
|
)
|
||
Europe
|
(432
|
)
|
|
(432
|
)
|
||
Asia
|
(163
|
)
|
|
(49
|
)
|
||
Surface Technologies
|
(21
|
)
|
|
(7
|
)
|
||
|
(3,118
|
)
|
|
(2,551
|
)
|
||
Derivatives - net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension / OPEB funded status obligation (net of $336 million and $342 million tax benefit in June 30, 2015 and December 31, 2014, respectively)
|
(623
|
)
|
|
(633
|
)
|
||
|
$
|
(3,742
|
)
|
|
$
|
(3,185
|
)
|
(Millions of dollars)
|
2015
|
|
2014
|
||||
Balance, January 1,
|
$
|
176
|
|
|
$
|
307
|
|
Net income
|
6
|
|
|
8
|
|
||
Distributions to noncontrolling interest
|
(5
|
)
|
|
(8
|
)
|
||
Redemption value adjustments/accretion
|
4
|
|
|
1
|
|
||
Foreign currency translation and other
|
(6
|
)
|
|
(2
|
)
|
||
Purchase of noncontrolling interest *
|
—
|
|
|
(112
|
)
|
||
Balance, June 30,
|
$
|
175
|
|
|
$
|
194
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(Dollar amounts in millions, except per share data)
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
Reported Amounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
2,738
|
|
|
$
|
3,113
|
|
|
(12
|
)%
|
|
$
|
5,495
|
|
|
$
|
6,139
|
|
|
(10
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,516
|
|
|
$
|
1,767
|
|
|
(14
|
)%
|
|
$
|
3,046
|
|
|
$
|
3,493
|
|
|
(13
|
)%
|
Gross margin (a)
|
$
|
1,222
|
|
|
$
|
1,346
|
|
|
(9
|
)%
|
|
$
|
2,449
|
|
|
$
|
2,646
|
|
|
(7
|
)%
|
As a percent of sales
|
44.6
|
%
|
|
43.2
|
%
|
|
|
|
44.6
|
%
|
|
43.1
|
%
|
|
|
||||||
Selling, general and administrative
|
$
|
297
|
|
|
$
|
335
|
|
|
(11
|
)%
|
|
$
|
596
|
|
|
$
|
661
|
|
|
(10
|
)%
|
As a percent of sales
|
10.8
|
%
|
|
10.8
|
%
|
|
|
|
10.8
|
%
|
|
10.8
|
%
|
|
|
||||||
Depreciation and amortization
|
$
|
278
|
|
|
$
|
293
|
|
|
(5
|
)%
|
|
$
|
555
|
|
|
$
|
578
|
|
|
(4
|
)%
|
Cost reduction program and other charges (b)
|
$
|
146
|
|
|
$
|
—
|
|
|
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
|
|
Other income (expense) - net
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
$
|
(2
|
)
|
|
$
|
12
|
|
|
|
||
Operating profit
|
$
|
480
|
|
|
$
|
697
|
|
|
(31
|
)%
|
|
$
|
1,103
|
|
|
$
|
1,372
|
|
|
(20
|
)%
|
As a percent of sales
|
17.5
|
%
|
|
22.4
|
%
|
|
|
|
20.1
|
%
|
|
22.3
|
%
|
|
|
||||||
Interest expense - net
|
$
|
40
|
|
|
$
|
43
|
|
|
(7
|
)%
|
|
$
|
84
|
|
|
$
|
89
|
|
|
(6
|
)%
|
Effective tax rate
|
29.8
|
%
|
|
28.0
|
%
|
|
|
|
28.8
|
%
|
|
28.0
|
%
|
|
|
||||||
Income from equity investments
|
$
|
10
|
|
|
$
|
10
|
|
|
—
|
%
|
|
$
|
21
|
|
|
$
|
19
|
|
|
11
|
%
|
Noncontrolling interests
|
$
|
(11
|
)
|
|
$
|
(14
|
)
|
|
(21
|
)%
|
|
$
|
(23
|
)
|
|
$
|
(28
|
)
|
|
(18
|
)%
|
Net income - Praxair, Inc.
|
$
|
308
|
|
|
$
|
467
|
|
|
(34
|
)%
|
|
$
|
724
|
|
|
$
|
915
|
|
|
(21
|
)%
|
Diluted earnings per share
|
$
|
1.06
|
|
|
$
|
1.58
|
|
|
(33
|
)%
|
|
$
|
2.49
|
|
|
$
|
3.08
|
|
|
(19
|
)%
|
Diluted shares outstanding
|
290,102
|
|
|
295,976
|
|
|
(2
|
)%
|
|
290,940
|
|
|
296,679
|
|
|
(2
|
)%
|
||||
2015 Adjusted Amounts (c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating profit
|
$
|
626
|
|
|
$
|
697
|
|
|
(10
|
)%
|
|
$
|
1,249
|
|
|
$
|
1,372
|
|
|
(9
|
)%
|
As a percent of sales
|
22.9
|
%
|
|
22.4
|
%
|
|
|
|
22.7
|
%
|
|
22.3
|
%
|
|
|
||||||
Effective tax rate
|
28.0
|
%
|
|
28.0
|
%
|
|
|
|
28.0
|
%
|
|
28.0
|
%
|
|
|
||||||
Net income - Praxair, Inc.
|
$
|
420
|
|
|
$
|
467
|
|
|
(10
|
)%
|
|
$
|
836
|
|
|
$
|
915
|
|
|
(9
|
)%
|
Diluted earnings per share
|
$
|
1.45
|
|
|
$
|
1.58
|
|
|
(8
|
)%
|
|
$
|
2.88
|
|
|
$
|
3.08
|
|
|
(6
|
)%
|
(a)
|
Gross margin excludes depreciation and amortization expense.
|
(b)
|
See Note 2 to the condensed consolidated financial statements.
|
(c)
|
Adjusted amounts are non-GAAP measures which exclude the impact of the cost reduction program and other charges in the second quarter of 2015 (see Note 2 to the condensed consolidated financial statements). A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
||||||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
(2
|
)%
|
|
(6
|
)%
|
|
(1
|
)%
|
|
(5
|
)%
|
Price
|
1
|
%
|
|
7
|
%
|
|
1
|
%
|
|
6
|
%
|
Cost pass-through
|
(2
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
Currency
|
(9
|
)%
|
|
(9
|
)%
|
|
(8
|
)%
|
|
(8
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(23
|
)%
|
|
—
|
%
|
|
(13
|
)%
|
Reported
|
(12
|
)%
|
|
(31
|
)%
|
|
(10
|
)%
|
|
(20
|
)%
|
Add: Cost reduction program and other charges
|
—
|
%
|
|
21
|
%
|
|
—
|
%
|
|
11
|
%
|
Adjusted
|
(12
|
)%
|
|
(10
|
)%
|
|
(10
|
)%
|
|
(9
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
25
|
%
|
|
24
|
%
|
|
(2
|
)%
|
|
24
|
%
|
|
24
|
%
|
|
(1
|
)%
|
Metals
|
17
|
%
|
|
17
|
%
|
|
(2
|
)%
|
|
17
|
%
|
|
17
|
%
|
|
(2
|
)%
|
Energy
|
13
|
%
|
|
14
|
%
|
|
(1
|
)%
|
|
13
|
%
|
|
14
|
%
|
|
1
|
%
|
Chemicals
|
10
|
%
|
|
10
|
%
|
|
(3
|
)%
|
|
10
|
%
|
|
10
|
%
|
|
(4
|
)%
|
Electronics
|
8
|
%
|
|
7
|
%
|
|
1
|
%
|
|
8
|
%
|
|
7
|
%
|
|
3
|
%
|
Healthcare
|
8
|
%
|
|
8
|
%
|
|
6
|
%
|
|
8
|
%
|
|
8
|
%
|
|
5
|
%
|
Food & Beverage
|
9
|
%
|
|
8
|
%
|
|
7
|
%
|
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
Aerospace
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
Other
|
7
|
%
|
|
9
|
%
|
|
(6
|
)%
|
|
9
|
%
|
|
9
|
%
|
|
(8
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
28
|
%
|
|
29
|
%
|
|
28
|
%
|
|
29
|
%
|
Merchant
|
35
|
%
|
|
34
|
%
|
|
34
|
%
|
|
34
|
%
|
Packaged Gas
|
29
|
%
|
|
29
|
%
|
|
29
|
%
|
|
29
|
%
|
Other
|
8
|
%
|
|
8
|
%
|
|
9
|
%
|
|
8
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(Dollar amounts in millions)
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
SALES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
1,482
|
|
|
$
|
1,628
|
|
|
(9
|
)%
|
|
$
|
2,981
|
|
|
$
|
3,208
|
|
|
(7
|
)%
|
Europe
|
331
|
|
|
408
|
|
|
(19
|
)%
|
|
657
|
|
|
805
|
|
|
(18
|
)%
|
||||
South America
|
388
|
|
|
509
|
|
|
(24
|
)%
|
|
789
|
|
|
997
|
|
|
(21
|
)%
|
||||
Asia
|
387
|
|
|
394
|
|
|
(2
|
)%
|
|
758
|
|
|
786
|
|
|
(4
|
)%
|
||||
Surface Technologies
|
150
|
|
|
174
|
|
|
(14
|
)%
|
|
310
|
|
|
343
|
|
|
(10
|
)%
|
||||
|
$
|
2,738
|
|
|
$
|
3,113
|
|
|
(12
|
)%
|
|
$
|
5,495
|
|
|
$
|
6,139
|
|
|
(10
|
)%
|
OPERATING PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
388
|
|
|
$
|
398
|
|
|
(3
|
)%
|
|
$
|
767
|
|
|
$
|
776
|
|
|
(1
|
)%
|
Europe
|
63
|
|
|
78
|
|
|
(19
|
)%
|
|
125
|
|
|
157
|
|
|
(20
|
)%
|
||||
South America
|
81
|
|
|
113
|
|
|
(28
|
)%
|
|
166
|
|
|
226
|
|
|
(27
|
)%
|
||||
Asia
|
69
|
|
|
76
|
|
|
(9
|
)%
|
|
138
|
|
|
151
|
|
|
(9
|
)%
|
||||
Surface Technologies
|
25
|
|
|
32
|
|
|
(22
|
)%
|
|
53
|
|
|
62
|
|
|
(15
|
)%
|
||||
Segment operating profit
|
626
|
|
|
697
|
|
|
(10
|
)%
|
|
1,249
|
|
|
1,372
|
|
|
(9
|
)%
|
||||
Cost reduction program and other charges (Note 2)
|
(146
|
)
|
|
—
|
|
|
|
|
(146
|
)
|
|
—
|
|
|
|
||||||
Total operating profit
|
$
|
480
|
|
|
$
|
697
|
|
|
(31
|
)%
|
|
$
|
1,103
|
|
|
$
|
1,372
|
|
|
(20
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
Sales
|
$
|
1,482
|
|
|
$
|
1,628
|
|
|
(9
|
)%
|
|
$
|
2,981
|
|
|
$
|
3,208
|
|
|
(7
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
765
|
|
|
896
|
|
|
|
|
1,556
|
|
|
1,766
|
|
|
|
||||||
Gross margin
|
717
|
|
|
732
|
|
|
|
|
1,425
|
|
|
1,442
|
|
|
|
||||||
Operating expenses
|
175
|
|
|
182
|
|
|
|
|
354
|
|
|
365
|
|
|
|
||||||
Depreciation and amortization
|
154
|
|
|
152
|
|
|
|
|
304
|
|
|
301
|
|
|
|
||||||
Operating profit
|
$
|
388
|
|
|
$
|
398
|
|
|
(3
|
)%
|
|
$
|
767
|
|
|
$
|
776
|
|
|
(1
|
)%
|
Margin %
|
26.2
|
%
|
|
24.4
|
%
|
|
|
|
25.7
|
%
|
|
24.2
|
%
|
|
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
||||||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
(2
|
)%
|
|
(4
|
)%
|
|
1
|
%
|
|
(1
|
)%
|
Price
|
1
|
%
|
|
3
|
%
|
|
(1
|
)%
|
|
2
|
%
|
Cost pass-through
|
(5
|
)%
|
|
—
|
%
|
|
(4
|
)%
|
|
—
|
%
|
Currency
|
(3
|
)%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
(3
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
(9
|
)%
|
|
(3
|
)%
|
|
(7
|
)%
|
|
(1
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
31
|
%
|
|
30
|
%
|
|
(4
|
)%
|
|
31
|
%
|
|
30
|
%
|
|
(1
|
)%
|
Metals
|
11
|
%
|
|
11
|
%
|
|
(9
|
)%
|
|
11
|
%
|
|
12
|
%
|
|
(8
|
)%
|
Energy
|
18
|
%
|
|
21
|
%
|
|
1
|
%
|
|
18
|
%
|
|
20
|
%
|
|
4
|
%
|
Chemicals
|
10
|
%
|
|
10
|
%
|
|
(5
|
)%
|
|
10
|
%
|
|
10
|
%
|
|
(6
|
)%
|
Electronics
|
4
|
%
|
|
4
|
%
|
|
11
|
%
|
|
5
|
%
|
|
4
|
%
|
|
19
|
%
|
Healthcare
|
7
|
%
|
|
7
|
%
|
|
4
|
%
|
|
7
|
%
|
|
7
|
%
|
|
4
|
%
|
Food & Beverage
|
9
|
%
|
|
8
|
%
|
|
6
|
%
|
|
9
|
%
|
|
8
|
%
|
|
7
|
%
|
Aerospace
|
2
|
%
|
|
1
|
%
|
|
8
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Other
|
8
|
%
|
|
8
|
%
|
|
(10
|
)%
|
|
8
|
%
|
|
8
|
%
|
|
(7
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
28
|
%
|
|
31
|
%
|
|
28
|
%
|
|
31
|
%
|
Merchant
|
37
|
%
|
|
35
|
%
|
|
37
|
%
|
|
35
|
%
|
Packaged Gas
|
33
|
%
|
|
32
|
%
|
|
33
|
%
|
|
32
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Variance %
|
|
2015
|
|
2014
|
|
Variance %
|
||||||||||
Sales
|
$
|
331
|
|
|
$
|
408
|
|
|
(19
|
)%
|
|
$
|
657
|
|
|
$
|
805
|
|
|
(18
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
188
|
|
|
230
|
|
|
|
|
370
|
|
|
448
|
|
|
|
||||||
Gross margin
|
143
|
|
|
178
|
|
|
|
|
287
|
|
|
357
|
|
|
|
||||||
Operating expenses
|
44
|
|
|
58
|
|
|
|
|
90
|
|
|
115
|
|
|
|
||||||
Depreciation and amortization
|
36
|
|
|
42
|
|
|
|
|
72
|
|
|
85
|
|
|
|
||||||
Operating profit
|
$
|
63
|
|
|
$
|
78
|
|
|
(19
|
)%
|
|
$
|
125
|
|
|
$
|
157
|
|
|
(20
|
)%
|
Margin %
|
19.0
|
%
|
|
19.1
|
%
|
|
|
|
19.0
|
%
|
|
19.5
|
%
|
|
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
(1
|
)%
|
|
(4
|
)%
|
|
(1
|
)%
|
|
(2
|
)%
|
Price
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
(19
|
)%
|
|
(19
|
)%
|
|
(18
|
)%
|
|
(18
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
Other
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
|
(3
|
)%
|
|
(19
|
)%
|
|
(19
|
)%
|
|
(18
|
)%
|
|
(20
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
23
|
%
|
|
21
|
%
|
|
7
|
%
|
|
22
|
%
|
|
22
|
%
|
|
4
|
%
|
Metals
|
17
|
%
|
|
16
|
%
|
|
3
|
%
|
|
17
|
%
|
|
16
|
%
|
|
6
|
%
|
Energy
|
6
|
%
|
|
8
|
%
|
|
(24
|
)%
|
|
6
|
%
|
|
7
|
%
|
|
(17
|
)%
|
Chemicals
|
14
|
%
|
|
15
|
%
|
|
(4
|
)%
|
|
14
|
%
|
|
15
|
%
|
|
(5
|
)%
|
Electronics
|
7
|
%
|
|
6
|
%
|
|
4
|
%
|
|
8
|
%
|
|
7
|
%
|
|
6
|
%
|
Healthcare
|
11
|
%
|
|
11
|
%
|
|
2
|
%
|
|
11
|
%
|
|
11
|
%
|
|
—
|
%
|
Food & Beverage
|
10
|
%
|
|
9
|
%
|
|
5
|
%
|
|
9
|
%
|
|
9
|
%
|
|
4
|
%
|
Aerospace
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
Other
|
11
|
%
|
|
13
|
%
|
|
(3
|
)%
|
|
12
|
%
|
|
12
|
%
|
|
(2
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
19
|
%
|
|
18
|
%
|
|
19
|
%
|
|
19
|
%
|
Merchant
|
33
|
%
|
|
36
|
%
|
|
34
|
%
|
|
35
|
%
|
Packaged Gas
|
44
|
%
|
|
43
|
%
|
|
43
|
%
|
|
43
|
%
|
Other
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
Sales
|
$
|
388
|
|
|
$
|
509
|
|
|
(24
|
)%
|
|
$
|
789
|
|
|
$
|
997
|
|
|
(21
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
219
|
|
|
279
|
|
|
|
|
440
|
|
|
555
|
|
|
|
||||||
Gross margin
|
169
|
|
|
230
|
|
|
|
|
349
|
|
|
442
|
|
|
|
||||||
Operating expenses
|
54
|
|
|
71
|
|
|
|
|
111
|
|
|
127
|
|
|
|
||||||
Depreciation and amortization
|
34
|
|
|
46
|
|
|
|
|
72
|
|
|
89
|
|
|
|
||||||
Operating profit
|
$
|
81
|
|
|
$
|
113
|
|
|
(28
|
)%
|
|
$
|
166
|
|
|
$
|
226
|
|
|
(27
|
)%
|
Margin %
|
20.9
|
%
|
|
22.2
|
%
|
|
|
|
21.0
|
%
|
|
22.7
|
%
|
|
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
(4
|
)%
|
|
(7
|
)%
|
|
(4
|
)%
|
|
(11
|
)%
|
Price
|
7
|
%
|
|
30
|
%
|
|
6
|
%
|
|
29
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
(28
|
)%
|
|
(28
|
)%
|
|
(24
|
)%
|
|
(24
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(23
|
)%
|
|
—
|
%
|
|
(21
|
)%
|
|
(24
|
)%
|
|
(28
|
)%
|
|
(21
|
)%
|
|
(27
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
21
|
%
|
|
21
|
%
|
|
4
|
%
|
|
22
|
%
|
|
21
|
%
|
|
5
|
%
|
Metals
|
29
|
%
|
|
29
|
%
|
|
2
|
%
|
|
28
|
%
|
|
29
|
%
|
|
(1
|
)%
|
Energy
|
2
|
%
|
|
2
|
%
|
|
15
|
%
|
|
2
|
%
|
|
2
|
%
|
|
21
|
%
|
Chemicals
|
9
|
%
|
|
9
|
%
|
|
3
|
%
|
|
9
|
%
|
|
9
|
%
|
|
3
|
%
|
Electronics
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Healthcare
|
18
|
%
|
|
17
|
%
|
|
11
|
%
|
|
17
|
%
|
|
17
|
%
|
|
9
|
%
|
Food & Beverage
|
12
|
%
|
|
12
|
%
|
|
6
|
%
|
|
12
|
%
|
|
13
|
%
|
|
7
|
%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
9
|
%
|
|
10
|
%
|
|
(6
|
)%
|
|
10
|
%
|
|
9
|
%
|
|
(8
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
27
|
%
|
|
26
|
%
|
|
27
|
%
|
|
26
|
%
|
Merchant
|
41
|
%
|
|
42
|
%
|
|
41
|
%
|
|
42
|
%
|
Packaged Gas
|
29
|
%
|
|
30
|
%
|
|
29
|
%
|
|
29
|
%
|
Other
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
Sales
|
$
|
387
|
|
|
$
|
394
|
|
|
(2
|
)%
|
|
$
|
758
|
|
|
$
|
786
|
|
|
(4
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
245
|
|
|
250
|
|
|
|
|
478
|
|
|
501
|
|
|
|
||||||
Gross margin
|
142
|
|
|
144
|
|
|
|
|
280
|
|
|
285
|
|
|
|
||||||
Operating expenses
|
30
|
|
|
26
|
|
|
|
|
56
|
|
|
53
|
|
|
|
||||||
Depreciation and amortization
|
43
|
|
|
42
|
|
|
|
|
86
|
|
|
81
|
|
|
|
||||||
Operating profit
|
$
|
69
|
|
|
$
|
76
|
|
|
(9
|
)%
|
|
$
|
138
|
|
|
$
|
151
|
|
|
(9
|
)%
|
Margin %
|
17.8
|
%
|
|
19.3
|
%
|
|
|
|
18.2
|
%
|
|
19.2
|
%
|
|
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume / Sale of Equipment
|
1
|
%
|
|
(5
|
)%
|
|
(1
|
)%
|
|
(8
|
)%
|
Price
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(1
|
)%
|
Cost pass-through
|
(2
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
Currency
|
(2
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
Acquisitions/divestitures
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Other
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
1
|
%
|
|
(2
|
)%
|
|
(9
|
)%
|
|
(4
|
)%
|
|
(9
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
10
|
%
|
|
10
|
%
|
|
(9
|
)%
|
|
10
|
%
|
|
10
|
%
|
|
(8
|
)%
|
Metals
|
29
|
%
|
|
29
|
%
|
|
2
|
%
|
|
30
|
%
|
|
28
|
%
|
|
5
|
%
|
Energy
|
3
|
%
|
|
2
|
%
|
|
30
|
%
|
|
3
|
%
|
|
2
|
%
|
|
17
|
%
|
Chemicals
|
12
|
%
|
|
12
|
%
|
|
—
|
%
|
|
12
|
%
|
|
12
|
%
|
|
(1
|
)%
|
Electronics
|
31
|
%
|
|
33
|
%
|
|
(5
|
)%
|
|
32
|
%
|
|
33
|
%
|
|
(5
|
)%
|
Healthcare
|
1
|
%
|
|
1
|
%
|
|
(14
|
)%
|
|
1
|
%
|
|
1
|
%
|
|
(16
|
)%
|
Food & Beverage
|
2
|
%
|
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
2
|
%
|
|
—
|
%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
12
|
%
|
|
11
|
%
|
|
5
|
%
|
|
10
|
%
|
|
12
|
%
|
|
(15
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
50
|
%
|
|
48
|
%
|
|
50
|
%
|
|
50
|
%
|
Merchant
|
31
|
%
|
|
29
|
%
|
|
31
|
%
|
|
29
|
%
|
Packaged Gas
|
12
|
%
|
|
13
|
%
|
|
12
|
%
|
|
12
|
%
|
Other
|
7
|
%
|
|
10
|
%
|
|
7
|
%
|
|
9
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||
Sales
|
$
|
150
|
|
|
$
|
174
|
|
|
(14
|
)%
|
|
$
|
310
|
|
|
$
|
343
|
|
|
(10
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
99
|
|
|
112
|
|
|
|
|
202
|
|
|
223
|
|
|
|
||||||
Gross margin
|
51
|
|
|
62
|
|
|
|
|
108
|
|
|
120
|
|
|
|
||||||
Operating expenses
|
15
|
|
|
19
|
|
|
|
|
34
|
|
|
36
|
|
|
|
||||||
Depreciation and amortization
|
11
|
|
|
11
|
|
|
|
|
21
|
|
|
22
|
|
|
|
||||||
Operating profit
|
$
|
25
|
|
|
$
|
32
|
|
|
(22
|
)%
|
|
$
|
53
|
|
|
$
|
62
|
|
|
(15
|
)%
|
Margin %
|
16.7
|
%
|
|
18.4
|
%
|
|
|
|
17.1
|
%
|
|
18.1
|
%
|
|
|
|
Quarter Ended June 30, 2015 vs. 2014
|
|
Six Months Ended June 30, 2015 vs. 2014
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume/Price
|
(6
|
)%
|
|
(17
|
)%
|
|
(2
|
)%
|
|
(8
|
)%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
(8
|
)%
|
|
(7
|
)%
|
|
(8
|
)%
|
|
(7
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(14
|
)%
|
|
(22
|
)%
|
|
(10
|
)%
|
|
(15
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
12
|
%
|
|
14
|
%
|
|
(21
|
)%
|
|
12
|
%
|
|
13
|
%
|
|
(13
|
)%
|
Metals
|
8
|
%
|
|
8
|
%
|
|
(5
|
)%
|
|
8
|
%
|
|
8
|
%
|
|
(8
|
)%
|
Energy
|
24
|
%
|
|
27
|
%
|
|
(16
|
)%
|
|
25
|
%
|
|
27
|
%
|
|
(9
|
)%
|
Chemicals
|
3
|
%
|
|
2
|
%
|
|
30
|
%
|
|
2
|
%
|
|
2
|
%
|
|
16
|
%
|
Electronics
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
Healthcare
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
4
|
%
|
|
3
|
%
|
|
—
|
%
|
|
4
|
%
|
|
3
|
%
|
|
—
|
%
|
Aerospace
|
37
|
%
|
|
33
|
%
|
|
2
|
%
|
|
36
|
%
|
|
33
|
%
|
|
5
|
%
|
Other
|
11
|
%
|
|
12
|
%
|
|
(13
|
)%
|
|
12
|
%
|
|
13
|
%
|
|
(9
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Percentage of YTD 2015 Consolidated Sales
|
|
Exchange Rate for
Income Statement
|
|
Exchange Rate for
Balance Sheet
|
|||||||||
|
Year-To-Date Average
|
|
June 30,
|
|
December 31,
|
|||||||||
Currency
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||
Brazilian real
|
12
|
%
|
|
2.96
|
|
|
2.29
|
|
|
3.10
|
|
|
2.66
|
|
Euro
|
12
|
%
|
|
0.90
|
|
|
0.73
|
|
|
0.90
|
|
|
0.83
|
|
Canadian dollar
|
8
|
%
|
|
1.23
|
|
|
1.10
|
|
|
1.25
|
|
|
1.16
|
|
Mexican peso
|
6
|
%
|
|
15.13
|
|
|
13.11
|
|
|
15.73
|
|
|
14.75
|
|
Chinese yuan
|
5
|
%
|
|
6.22
|
|
|
6.17
|
|
|
6.20
|
|
|
6.21
|
|
Korean won
|
4
|
%
|
|
1,099
|
|
|
1,049
|
|
|
1,116
|
|
|
1,094
|
|
India rupee
|
3
|
%
|
|
62.85
|
|
|
60.79
|
|
|
63.65
|
|
|
63.04
|
|
Argentine peso
|
1
|
%
|
|
8.82
|
|
|
7.82
|
|
|
9.09
|
|
|
8.55
|
|
Norwegian krone
|
<1%
|
|
|
7.75
|
|
|
6.04
|
|
|
7.86
|
|
|
7.45
|
|
Colombian peso
|
<1%
|
|
|
2,484
|
|
|
1,958
|
|
|
2,599
|
|
|
2,392
|
|
Russian ruble
|
<1%
|
|
|
57.28
|
|
|
35.01
|
|
|
55.32
|
|
|
60.74
|
|
Thailand bhat
|
<1%
|
|
|
32.94
|
|
|
32.55
|
|
|
33.82
|
|
|
32.91
|
|
(Millions of dollars)
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
NET CASH PROVIDED BY (USED FOR):
|
|
|
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (including noncontrolling interest)
|
$
|
747
|
|
|
$
|
943
|
|
Non-cash charges (credits):
|
|
|
|
||||
Add: Depreciation and amortization
|
555
|
|
|
578
|
|
||
Add: Deferred income taxes
|
(17
|
)
|
|
17
|
|
||
Add: Share-based compensation
|
17
|
|
|
28
|
|
||
Add: Cost reduction program and other charges (a)
|
135
|
|
|
—
|
|
||
Net income adjusted for non-cash charges
|
1,437
|
|
|
1,566
|
|
||
Working capital
|
(153
|
)
|
|
(198
|
)
|
||
Pension contributions
|
(12
|
)
|
|
(13
|
)
|
||
Long-term assets, liabilities and other
|
(57
|
)
|
|
28
|
|
||
Net cash provided by operating activities
|
$
|
1,215
|
|
|
$
|
1,383
|
|
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(749
|
)
|
|
(777
|
)
|
||
Acquisitions, net of cash acquired
|
(43
|
)
|
|
(170
|
)
|
||
Divestitures and asset sales
|
240
|
|
|
71
|
|
||
Net cash used for investing activities
|
$
|
(552
|
)
|
|
$
|
(876
|
)
|
FINANCING ACTIVITIES
|
|
|
|
||||
Debt increases (reductions) - net
|
201
|
|
|
364
|
|
||
Issuances (purchases) of common stock - net
|
(408
|
)
|
|
(377
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(412
|
)
|
|
(381
|
)
|
||
Excess tax benefit on share-based compensation
|
17
|
|
|
24
|
|
||
Noncontrolling interest transactions and other
|
(25
|
)
|
|
(111
|
)
|
||
Net cash (used for) provided by financing activities
|
$
|
(627
|
)
|
|
$
|
(481
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
$
|
(26
|
)
|
|
$
|
9
|
|
Cash and cash equivalents, end-of-period
|
$
|
136
|
|
|
$
|
173
|
|
|
June 30,
|
||||||
(Dollar amounts in millions, except per share data)
|
2015
|
|
2014
|
||||
Debt-to-capital
|
62.5
|
%
|
|
54.5
|
%
|
||
After-tax return on capital
|
12.6
|
%
|
|
12.6
|
%
|
||
Return on equity
|
30.5
|
%
|
|
28.3
|
%
|
||
Adjusted EBITDA for the quarter ended
|
$
|
914
|
|
|
$
|
1,000
|
|
Adjusted EBITDA for the six months ended
|
$
|
1,825
|
|
|
$
|
1,969
|
|
Debt-to-adjusted EBITDA
|
2.4
|
|
|
2.3
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2015 Adjusted amounts:*
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Operating profit
|
$
|
626
|
|
|
$
|
697
|
|
|
$
|
1,249
|
|
|
$
|
1,372
|
|
As a percent of sales
|
22.9
|
%
|
|
22.4
|
%
|
|
22.7
|
%
|
|
22.3
|
%
|
||||
EBITDA
|
$
|
914
|
|
|
$
|
1,000
|
|
|
$
|
1,825
|
|
|
$
|
1,969
|
|
EBITDA margin
|
33.4
|
%
|
|
32.1
|
%
|
|
33.2
|
%
|
|
32.1
|
%
|
||||
Effective tax rate
|
28.0
|
%
|
|
28.0
|
%
|
|
28.0
|
%
|
|
28.0
|
%
|
||||
Net income - Praxair, Inc.
|
$
|
420
|
|
|
$
|
467
|
|
|
$
|
836
|
|
|
$
|
915
|
|
Diluted earnings per share
|
1.45
|
|
|
1.58
|
|
|
2.88
|
|
|
3.08
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Debt
|
$
|
9,347
|
|
|
$
|
9,165
|
|
Less: cash and cash equivalents
|
(136
|
)
|
|
(173
|
)
|
||
Net debt
|
9,211
|
|
|
8,992
|
|
||
Equity and redeemable noncontrolling interests
|
|
|
|
||||
Redeemable noncontrolling interests
|
175
|
|
|
194
|
|
||
Praxair, Inc. shareholders’ equity
|
4,964
|
|
|
6,911
|
|
||
Noncontrolling interests
|
380
|
|
|
395
|
|
||
Total equity and redeemable noncontrolling interests
|
5,519
|
|
|
7,500
|
|
||
Capital
|
$
|
14,730
|
|
|
$
|
16,492
|
|
DEBT-TO-CAPITAL RATIO
|
62.5
|
%
|
|
54.5
|
%
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30, 2015
|
|
December 31, 2014
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted operating profit (see below)
|
$
|
2,623
|
|
|
$
|
1,249
|
|
|
$
|
1,374
|
|
|
$
|
2,741
|
|
|
$
|
1,372
|
|
|
$
|
1,369
|
|
Less: adjusted income taxes (see below)
|
(674
|
)
|
|
(326
|
)
|
|
(348
|
)
|
|
(719
|
)
|
|
(359
|
)
|
|
(360
|
)
|
||||||
Less: tax benefit on interest expense*
|
(48
|
)
|
|
(23
|
)
|
|
(25
|
)
|
|
(47
|
)
|
|
(25
|
)
|
|
(22
|
)
|
||||||
Add: equity income
|
44
|
|
|
21
|
|
|
23
|
|
|
36
|
|
|
19
|
|
|
17
|
|
||||||
Net operating profit after-tax (NOPAT)
|
$
|
1,945
|
|
|
$
|
921
|
|
|
$
|
1,024
|
|
|
$
|
2,011
|
|
|
$
|
1,007
|
|
|
$
|
1,004
|
|
Capital:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
June 30th
|
$
|
14,730
|
|
|
|
|
|
|
$
|
16,492
|
|
|
|
|
|
||||||||
March 31st
|
$
|
14,842
|
|
|
|
|
|
|
$
|
16,319
|
|
|
|
|
|
||||||||
December 31st, 2014 & 2013
|
$
|
15,318
|
|
|
|
|
|
|
$
|
15,983
|
|
|
|
|
|
||||||||
September 30th, 2014 & 2013
|
$
|
16,083
|
|
|
|
|
|
|
$
|
15,757
|
|
|
|
|
|
||||||||
June 30th, 2014 & 2013
|
$
|
16,492
|
|
|
|
|
|
|
$
|
15,548
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
15,493
|
|
|
|
|
|
|
$
|
16,020
|
|
|
|
|
|
||||||||
AFTER-TAX ROC
|
12.6
|
%
|
|
|
|
|
|
12.6
|
%
|
|
|
|
|
*
|
Tax benefit on interest expense is computed using the effective rate. The effective tax rate used was 28% for
2015
and
2014
.
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30, 2015
|
|
December 31, 2014
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted Net income - Praxair, Inc. (see below)
|
$
|
1,773
|
|
|
$
|
836
|
|
|
$
|
937
|
|
|
$
|
1,828
|
|
|
$
|
915
|
|
|
$
|
913
|
|
Praxair, Inc. shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
June 30th
|
$
|
4,964
|
|
|
|
|
|
|
$
|
6,911
|
|
|
|
|
|
||||||||
March 31st
|
$
|
5,018
|
|
|
|
|
|
|
$
|
6,600
|
|
|
|
|
|
||||||||
December 31st, 2014 & 2013
|
$
|
5,623
|
|
|
|
|
|
|
$
|
6,609
|
|
|
|
|
|
||||||||
September 30th, 2014 & 2013
|
$
|
6,552
|
|
|
|
|
|
|
$
|
6,210
|
|
|
|
|
|
||||||||
June 30th, 2014 & 2013
|
$
|
6,911
|
|
|
|
|
|
|
$
|
5,928
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
5,814
|
|
|
|
|
|
|
$
|
6,452
|
|
|
|
|
|
||||||||
ROE
|
30.5
|
%
|
|
|
|
|
|
28.3
|
%
|
|
|
|
|
|
Quarter Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Adjusted net income - Praxair, Inc. (see below)
|
$
|
420
|
|
|
$
|
467
|
|
Add: noncontrolling interest
|
12
|
|
|
14
|
|
||
Add: interest expense - net
|
40
|
|
|
43
|
|
||
Add: adjusted income taxes (see below)
|
164
|
|
|
183
|
|
||
Add: depreciation and amortization
|
278
|
|
|
293
|
|
||
Adjusted EBITDA
|
$
|
914
|
|
|
$
|
1,000
|
|
|
|
|
|
|
|||
Reported Sales
|
$
|
2,738
|
|
|
$
|
3,113
|
|
Adjusted EBITDA Margin
|
33.4
|
%
|
|
32.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
|
Four
Quarter
Trailing
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30, 2015
|
|
December 31, 2014
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net income - Praxair, Inc. (see below)
|
$
|
1,773
|
|
|
$
|
836
|
|
|
$
|
937
|
|
|
$
|
1,828
|
|
|
$
|
915
|
|
|
$
|
913
|
|
Add: adjusted noncontrolling interest (see below)
|
48
|
|
|
24
|
|
|
24
|
|
|
62
|
|
|
28
|
|
|
34
|
|
||||||
Add: adjusted interest expense - net (see below)
|
172
|
|
|
84
|
|
|
88
|
|
|
168
|
|
|
89
|
|
|
79
|
|
||||||
Add: adjusted income taxes (see below)
|
674
|
|
|
326
|
|
|
348
|
|
|
719
|
|
|
359
|
|
|
360
|
|
||||||
Add: depreciation and amortization
|
1,147
|
|
|
555
|
|
|
592
|
|
|
1,146
|
|
|
578
|
|
|
568
|
|
||||||
ADJUSTED EBITDA
|
$
|
3,814
|
|
|
$
|
1,825
|
|
|
$
|
1,989
|
|
|
$
|
3,923
|
|
|
$
|
1,969
|
|
|
$
|
1,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported Sales
|
|
|
5,495
|
|
|
|
|
|
|
6,139
|
|
|
|
||||||||||
Adjusted EBITDA Margin
|
|
|
33.2
|
%
|
|
|
|
|
|
32.1
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
June 30th
|
$
|
9,211
|
|
|
|
|
|
|
$
|
8,992
|
|
|
|
|
|
||||||||
March 31st
|
$
|
9,279
|
|
|
|
|
|
|
$
|
9,126
|
|
|
|
|
|
||||||||
December 31st, 2014 & 2013
|
$
|
9,132
|
|
|
|
|
|
|
$
|
8,673
|
|
|
|
|
|
||||||||
September 30th, 2014 & 2013
|
$
|
8,953
|
|
|
|
|
|
|
$
|
8,892
|
|
|
|
|
|
||||||||
June 30th, 2014 & 2013
|
$
|
8,992
|
|
|
|
|
|
|
$
|
9,004
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
9,113
|
|
|
|
|
|
|
$
|
8,937
|
|
|
|
|
|
||||||||
DEBT-TO-ADJUSTED EBITDA RATIO
|
2.4
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
Six Months Ended December 31,
|
||||||||||||||||||
(Dollar amounts in millions, except per share data)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
2014
|
|
2013
|
||||||||||||
Adjusted Operating Profit
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported operating profit
|
$
|
480
|
|
|
$
|
697
|
|
|
$
|
1,103
|
|
|
$
|
1,372
|
|
$
|
1,236
|
|
|
$
|
1,360
|
|
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
131
|
|
|
—
|
|
||||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
7
|
|
|
9
|
|
||||||
Add: Cost reduction program
|
146
|
|
|
—
|
|
|
146
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Total adjustments
|
146
|
|
|
—
|
|
|
146
|
|
|
—
|
|
138
|
|
|
9
|
|
||||||
Adjusted operating profit
|
$
|
626
|
|
|
$
|
697
|
|
|
$
|
1,249
|
|
|
$
|
1,372
|
|
$
|
1,374
|
|
|
$
|
1,369
|
|
Reported percent change
|
(31
|
)%
|
|
|
|
(20
|
)%
|
|
|
(9
|
)%
|
|
|
|||||||||
Adjusted percent change
|
(10
|
)%
|
|
|
|
(9
|
)%
|
|
|
—
|
%
|
|
|
|||||||||
Adjusted Interest Expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported interest expense
|
$
|
40
|
|
|
$
|
43
|
|
|
$
|
84
|
|
|
$
|
89
|
|
$
|
124
|
|
|
$
|
97
|
|
Less: Bond redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(36
|
)
|
|
(18
|
)
|
||||||
Total adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(36
|
)
|
|
(18
|
)
|
||||||
Adjusted interest expense
|
$
|
40
|
|
|
$
|
43
|
|
|
$
|
84
|
|
|
$
|
89
|
|
$
|
88
|
|
|
$
|
79
|
|
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported income taxes
|
$
|
131
|
|
|
$
|
183
|
|
|
$
|
293
|
|
|
$
|
359
|
|
$
|
332
|
|
|
$
|
311
|
|
Add: Bond redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
14
|
|
|
6
|
|
||||||
Add: Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
40
|
|
||||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2
|
|
|
3
|
|
||||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Add: Cost reduction program
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Total adjustments
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
16
|
|
|
49
|
|
||||||
Adjusted income taxes
|
$
|
164
|
|
|
$
|
183
|
|
|
$
|
326
|
|
|
$
|
359
|
|
$
|
348
|
|
|
$
|
360
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
||||||||
Reported diluted EPS
|
$
|
1.06
|
|
|
$
|
1.58
|
|
|
$
|
2.49
|
|
|
$
|
3.08
|
|
|
Add: Bond redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Less: Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Add: Cost reduction program
|
0.39
|
|
|
—
|
|
|
0.39
|
|
|
—
|
|
|
||||
Total adjustments
|
$
|
0.39
|
|
|
$
|
—
|
|
|
$
|
0.39
|
|
|
$
|
—
|
|
|
Adjusted diluted EPS
|
$
|
1.45
|
|
|
$
|
1.58
|
|
|
$
|
2.88
|
|
|
$
|
3.08
|
|
|
Reported percent change
|
(33
|
)%
|
|
|
|
|
(19
|
)%
|
|
|
|
|||||
Adjusted percent change
|
(8
|
)%
|
|
|
|
|
(6
|
)%
|
|
|
|
(a)
|
Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Praxair in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
|
(b)
|
There were no changes in Praxair’s internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Praxair’s internal control over financial reporting.
|
|
•
|
Environmental protection including climate change;
|
•
|
Domestic and international tax laws and currency controls;
|
•
|
Safety;
|
•
|
Securities laws (e.g., SEC and generally accepted accounting principles in the United States);
|
•
|
Trade and import/ export restrictions;
|
•
|
Antitrust matters;
|
•
|
Global anti-bribery laws, including the U.S. Foreign Corrupt Practices Act;
|
•
|
Healthcare reimbursement regulations; and
|
•
|
Conflict minerals
|
•
|
The need to implement or remediate controls, procedures and policies appropriate for a larger public company at companies that prior to the acquisition lacked these controls, procedures and policies;
|
•
|
Diversion of management time and focus from operating existing business to acquisition integration challenges;
|
•
|
Cultural challenges associated with integrating employees from the acquired company into the existing organization;
|
•
|
The need to integrate each company’s accounting, management information, human resource and other administrative systems to permit effective management;
|
•
|
Difficulty with the assimilation of acquired operations and products;
|
•
|
Failure to achieve targeted synergies; and
|
•
|
Inability to retain key employees and business relationships of acquired companies.
|
Period
|
Total Number
of Shares
Purchased
(Thousands)
|
|
Average
Price Paid
Per Share
|
|
Total Numbers of Shares
Purchased as Part of
Publicly Announced
Program (1)
(Thousands)
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
|
||||||
April 2015
|
317
|
|
|
$
|
121.99
|
|
|
317
|
|
|
$
|
765
|
|
May 2015
|
1,034
|
|
|
$
|
120.30
|
|
|
1,034
|
|
|
$
|
640
|
|
June 2015
|
766
|
|
|
$
|
121.42
|
|
|
766
|
|
|
$
|
547
|
|
Second Quarter 2015
|
2,117
|
|
|
$
|
120.96
|
|
|
2,117
|
|
|
$
|
547
|
|
(1)
|
On January 28, 2014, the Company's board of directors approved the repurchase of $1.5 billion of its common stock (2014 program) which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans) or through negotiated transactions, subject to market and business conditions.
|
(2)
|
As of June 30, 2015, the Company purchased $953 million of its common stock pursuant to the 2014 program, leaving an additional $547 million remaining authorized under the 2014 program. The 2014 program does not have any stated expiration date. In addition, on July 28, 2015, the Company’s board of directors approved the repurchase of $1.5 billion of its common stock (“2015 program”) which could take place from time to time on the open market (which could include the use of 10b5-1 trade plans) or through negotiated transactions, subject to market and business conditions. The 2015 program does not have any stated expiration date. The 2015 program is in addition to the 2014 program.
|
(a)
|
Exhibits
|
|
|
|
|
|
|
|
10.01*
|
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the Amended and Restated 2009 Praxair, Inc Long Term Incentive Plan is filed herewith.
|
|
|
|
|
|
12.01
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
31.01
|
|
Rule 13a-14(a) Certification
|
|
|
|
|
|
31.02
|
|
Rule 13a-14(a) Certification
|
|
|
|
|
|
32.01
|
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Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
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32.02
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Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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PRAXAIR, INC.
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(Registrant)
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Date: July 29, 2015
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By: /s/ Elizabeth T. Hirsch
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Elizabeth T. Hirsch
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Vice President and Controller
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(On behalf of the Registrant
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and as Chief Accounting Officer)
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1.
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Award of Restricted Stock Units. The Participant is hereby granted an award of [_____]
notional RSUs (the “Award”). Each RSU represents a bookkeeping entry which is intended to be equal in value to a single Share.
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2.
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Vesting of Award.
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a.
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Vesting. Except as otherwise provided in the Plan, this Award shall vest and become non-forfeitable on the day before the first annual meeting of shareholders of the Company occurring after the Grant Date if, and only if, the Participant has continuously served on the Board of Directors of the Company at all times from the Grant Date through the date of such annual meeting (the “Vesting Date”). Termination of such service for any reason prior to the Vesting Date shall result in a full and immediate forfeiture of the Award, except as provided in Section 2.b below.
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b.
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Change in Control.
Change in Control
. Notwithstanding any provision of this Section 2 to the contrary, in the event of a Change in Control occurring prior to the Vesting Date, except to the extent that a Replacement Award meeting the requirements set forth below is provided to the Participant to replace this Award, this Award shall become immediately vested.
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(i)
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Except as otherwise provided herein, a “Replacement Award” means an award: (a) having a value at least equal to the value of this Award as determined by the Committee in its sole discretion; (b) relating to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control; (c) which shall also become fully vested upon the Participant’s termination of service as a Director occurring in connection with, or during the period immediately after, such Change in Control but before the Vesting Date; and (d) with such other terms and conditions that are not less favorable to the Participant than the terms and conditions of this Award.
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(ii)
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If, immediately following the occurrence of a Change in Control, Shares of Praxair, Inc. common stock continue to be publicly traded, a Replacement Award may, in the sole discretion of the Committee, take the form of a continuation of this Award, subject to such adjustments as the Committee shall determine to be necessary to ensure that such Replacement Award remains no less favorable to the Participant than this Award.
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(iii)
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The determination of whether the conditions of this Section 2.b. are satisfied shall be made by the Committee in its sole discretion. All references to the Committee in this Section 2.b. shall mean the Committee as constituted immediately before the Change in Control.
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3.
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Payment of Vested Award; Treatment upon Change in Control.
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a.
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This Award shall be settled on the first business day on or next following the Vesting Date (the “Settlement Date”). Settlement of the Award shall occur by payment to the Participant of a number of Shares equal to the number of RSUs granted under this Award (plus any vested accrued Dividend Equivalents pursuant to Section
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4.
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Other Terms and Conditions. It is understood and agreed that the Award of RSUs evidenced hereby is subject to the following terms and conditions:
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a.
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Rights of Participant. Except as provided in Section 4.e., the Participant shall have no right to transfer, pledge, hypothecate or otherwise encumber the Award. Prior to the payment of Shares in satisfaction of this Award, the Participant shall have none of the rights of a stockholder of the Company with respect to the Award, including, but not limited to, voting rights and the right to receive dividends, subject to the accrual of dividend equivalents provided in Subsection (b) below.
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b.
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Dividend Equivalents. As of the date any dividend is paid to holders of Shares, regardless of whether the Director is then a Director, the Award will be credited with additional RSUs equal to the number of Shares that could have been purchased with the amount which would have been paid as dividends on that number of Shares (including fractions of a share to three decimals) equal to the number of RSUs then subject to this Award as of the record date applicable to such dividend. The number of additional RSUs to be credited will be calculated to three decimals by dividing the amount which would have been paid as dividends by the closing price of a Share as reported on the New York Stock Exchange as of the date the dividend would have been paid. In the case of dividends paid in property other than cash, the amount of the dividend shall be deemed to be the fair market value of the property at the time of the payment of the dividend, as determined in good faith by the Committee. Dividend Equivalents shall be settled in Shares on the Settlement Date, and any fractional amount shall be rounded down to the nearest whole share.
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c.
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No Right to Continued Service as a Director. This Award shall not confer upon the Participant any right with respect to continuance of service as a director of the Company, nor shall this Award interfere with the right of the Company’s Board of Directors or the shareholders to remove the Participant as a director, with or without cause.
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d.
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No Right to Future Awards. The Participant’s selection to receive this Award shall in no way entitle him/her to receive, or otherwise obligate the Company or its Board of Directors to provide the Participant, any future RSUs or other awards under the Plan or otherwise.
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e.
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Transferability. This Award is not transferable other than:
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(i)
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in the event of the Participant’s death, in which case this Award shall be transferred to the Participant’s executor, administrator, or legal representative, or
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(ii)
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pursuant to a domestic relations order.
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f.
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Cancellation of Award. Notwithstanding any other provision of this Award, the Committee may, in its sole discretion, cancel, rescind, suspend, withhold, or otherwise limit or restrict this Award, and/or recover any gains realized by the Participant in connection with this Award, in the event any actions by the Participant are determined by the Committee to (i) constitute a conflict of interest with Praxair, (ii) be prejudicial to Praxair’s interests, or (iii) violate any non-compete agreement or obligation of the Participant to Praxair, any confidentiality agreement or obligation of the Participant to Praxair, or Praxair’s applicable policies.
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5.
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Tax Withholding. Upon the Settlement Date, the Company may deduct from the number of Shares (or other form of payment if applicable) otherwise due the Participant, Shares (or other form of payment if applicable)having a Fair Market Value (or fair market value in the event of payment other than in Shares) sufficient to discharge all applicable federal, state, city, local or foreign taxes of any kind, if any, required to be withheld with respect to such payment; provided that, if Shares are so withheld, they shall be withheld only up to the minimum required tax withholding rates or such other rate that will not trigger a negative accounting impact on the Company
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In the alternative, the Company shall have the right to require the Participant to pay cash to satisfy any applicable withholding taxes as a condition to the payment of the Award.
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6.
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References. References herein to rights and obligations of the Participant shall apply, where appropriate, to the Participant’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Award.
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7.
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Governing Law. This Award shall be governed by and construed in accordance with the laws of Connecticut, without giving effect to principles of conflict of laws.
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8.
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No Third Party Beneficiaries. Except as expressly provided in the Plan or herein, neither the Plan nor this Award will confer on any person other than Praxair and the Participant any rights or remedies under the Plan or hereunder.
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RATIO OF EARNINGS TO FIXED CHARGES
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Praxair, Inc. and Subsidiaries
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Exhibit 12.01
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Six Months Ended June 30,
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Year Ended December 31,
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(Dollar amounts in millions, except ratios)
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2015
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2014
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2013
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2012
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2011
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Pre-tax income from continuing operations before adjustment for
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noncontrolling interests in consolidated subsidiaries or income or
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loss from equity investees
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$
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1,019
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$
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2,395
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$
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2,447
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$
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2,296
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$
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2,323
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Capitalized interest
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(18
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)
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(38
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)
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(69
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)
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(70
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)
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(62
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Depreciation of capitalized interest
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10
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27
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20
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20
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22
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Dividends from less than 50%-owned companies carried at equity
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6
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6
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10
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7
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6
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Adjusted pre-tax income from continuing operations before adjustment
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for noncontrolling interests in consolidated subsidiaries or income
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or loss from equity investees
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$
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1,017
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$
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2,390
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$
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2,408
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$
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2,253
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$
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2,289
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Fixed charges
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Interest on long-term and short-term debt
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$
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84
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$
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213
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$
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178
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$
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141
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$
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145
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Capitalized interest
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18
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38
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69
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70
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62
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Rental expenses representative of an interest factor
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22
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52
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43
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39
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38
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Total fixed charges
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$
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124
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$
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303
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$
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290
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$
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250
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$
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245
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Adjusted pre-tax income from continuing operations before adjustment
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for noncontrolling interests in consolidated subsidiaries or income or
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loss from equity investees plus total fixed charges
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$
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1,141
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$
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2,693
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$
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2,698
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$
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2,503
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$
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2,534
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RATIO OF EARNINGS TO FIXED CHARGES
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9.2
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8.9
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9.3
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10.0
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10.3
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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July 29, 2015
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By: /s/ Stephen F. Angel
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Stephen F. Angel
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Chairman, President
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Chief Executive Officer
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(principal executive officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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July 29, 2015
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By: /s/ Matthew J. White
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Matthew J. White
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Senior Vice President and
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Chief Financial Officer
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(principal financial officer)
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July 29, 2015
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By: /s/ Stephen F. Angel
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Stephen F. Angel
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Chairman, President
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Chief Executive Officer
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(principal executive officer)
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July 29, 2015
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By: /s/ Matthew J. White
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Matthew J. White
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Senior Vice President and
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Chief Financial Officer
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(principal financial officer)
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